Strong Used iPhone Market Benefits Users, Carriers, and Apple Alike

Many of us like to keep our hands on the latest Apple technology, purchasing a new iPhone at least every couple of years. But what happens to the used handsets we all leave behind? According to Consumer Intelligence Research Partners, these used iPhones make up a strong secondary market that benefits users, carriers, and even Apple themselves.

As AllThingsD reports, the survey had a number of very interesting findings. For instance, 53% of all consumers who purchased an iPhone 4S (or the cheaper iPhone 4 or 3GS models) ended up circulating their used phones into the secondary phone market.

The survey also noted that, when viewing the secondary smartphone market as a whole, 49% of used devices put back into the market were previous generation iPhones, while 21% were BlackBerry devices, while Android devices comprised 15%. Two-thirds of these devices were given away, while the rest were sold.

At first glance, it may seem like the flourishing secondary market would actually hurt Apple in some way by reducing sales of new devices. But according to the research, it actually helps Apple by creating brand loyalty in customers who would not otherwise have used an iPhone.

Carriers also stand to benefit significantly from the secondary smartphone market, as they do not have to pay any subsidies on used devices, which allows them to obtain a higher profit ratio than from the activation of new devices. The research suggests that carriers save around $400 for each used phone they activate. As you can imagine, this adds up significantly.

Of course, perhaps the biggest winners of all are the consumers buying the used phones. Used phone purchasers pay a lower price for an excellent product experience. Used devices in good condition provide almost the same experience as brand new devices, but for a fraction of the cost, and without having to sign a carrier contract.

Glenn is Managing Editor at MacTrast, and has been using a Mac since he bought his first MacBook Pro in 2006. He lives in a small town in Utah, enjoys bacon more than you can possibly imagine, and is severely addicted to pie.